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Scariest charts of the day


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#1 Spock

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Posted 02 June 2009 - 04:49 PM

Leave it to Brad Setser to offer up the scariest pictures this side of Sam Raimi's "Drag Me to Hell".

In a missive found here:

http://blogs.cfr.org/setser/

...Bad Brad lays out the case--using two simple graphs--that Uncle Sugar has become the "borrower of first, last and only resort".

The questions going forward are:

1. How long can Uncle keep up the borrowing and spending spree?

2. How much of Uncle's debt will the Fed and our foreign debt enablers snap up?

3. When will the U.S. fiatsco totally collapse due to #3 above? (bonus question: When will Treasury interest rates sky and the U.S. bond market collapse too?)

4. Most important question of all: When will the tens of millions of sheeple start borrowing and speculating on housing again in order to re-incite the credit/derivatives bubble?

Inquiring Vulcan's wanna know.

#2 JonLaw

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Posted 02 June 2009 - 05:05 PM

Considering there is actually an infinite demand for liar loans, people will start speculating the instant that the entire subprime/alt-A securitization edifice is reconstructed.

However, there is no longer, and never really was, an infinite demand for CDOs and CDO squared.

So, the only "solution" is to create phantom demand for liar loans from the Fed.

I'm not seeing much phantom demand.
A day late and a dollar short.

#3 JonLaw

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Posted 02 June 2009 - 05:09 PM

The only significant debt destruction I've seen recently has been located on the face value of Heywood's GM bonds.
A day late and a dollar short.

#4 qqqbear

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Posted 02 June 2009 - 08:30 PM

http://2.bp.blogspot.../ffreq12008.jpg

It seems consistent with the above....which needs some updating

#5 bearking

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Posted 02 June 2009 - 11:03 PM

Yeah, that is scary. It would have been even more scary if El Fed/Treasuries just let the whole thing collapse. What a mess.




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